What Happened?
Shares of luxury electric car manufacturer Lucid (NASDAQ: LCID) fell 4.3% in the afternoon session after the company launched its first certified pre-owned vehicle program, "Lucid Recharged," but investor focus remained on broader financial concerns. The new program aimed to offer customers more choice with manufacturer-backed standards. However, the announcement did not impress investors, who seemed more concerned with the electric vehicle maker's underlying financial health. The move followed a recent downgrade from Morgan Stanley to "Underweight," which cited worries that the company might not achieve profitability until 2028. Additionally, Lucid previously adjusted its 2025 production guidance downward.
The shares closed the day at $11.83, down 6.1% from previous close.
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What Is The Market Telling Us
Lucid’s shares are extremely volatile and have had 53 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 6.2% on the news that Morgan Stanley downgraded the stock and sharply cut its price target, citing a prolonged path to profitability and significant risks for shareholders.
The analyst lowered the rating to Underweight from Equal Weight and slashed the price target to $10 from $30. The downgrade was based on projections that Lucid would not achieve gross profitability until 2028 and would continue to face operating losses through 2031. The firm also warned of a notable shareholder dilution risk, estimating that Lucid would need to raise approximately $2 billion in equity by the second half of 2026 to fund its operations. This means the company might have to issue more stock, which could lower the value of existing shares. Broader industry headwinds were also mentioned, such as the expiration of federal EV tax credits, which were expected to contribute to slowing electric vehicle adoption.
Lucid is down 60.9% since the beginning of the year, and at $11.85 per share, it is trading 65.9% below its 52-week high of $34.80 from February 2025. Investors who bought $1,000 worth of Lucid’s shares 5 years ago would now be looking at an investment worth $118.86.
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